State regulators, facing criticism for failing to enforce pipeline safety laws three years after the deadly San Bruno disaster, have established what they call an "aggressive program of citations" designed to give utility companies a financial incentive to boost safety.

The move by the Public Utilities Commission - which said fines could range up to $50,000 per day of a violation - comes as it faces a backlog of more than 600 pending natural gas safety violations. The backlog includes many violations that Pacific Gas and Electric Co. acknowledged after its 2010 pipeline explosion, which killed eight people and destroyed 38 homes in San Bruno.

In the aftermath of the rupture, the commission was sharply criticized by the National Transportation Safety Board for lax oversight of the state's utility firms. The state's approach - known as voluntary compliance - had allowed companies to escape fines for any gas safety violations they acknowledged to regulators.

Holding pattern

The safety board found that the commission's culture "serves as an impediment to effective regulation," and that PG&E "exploited weaknesses in a lax system of oversight." But in recent months, the state and PG&E seem to have settled into a holding pattern that is similar to the enforcement stance adopted before the blast.

The commission has not issued a fine against a utility since early 2012, records show, when it fined PG&E $16.8 million for failing to check more than 14 miles of East Bay natural gas lines for leaks for decades. The utility appealed, citing its voluntary disclosure of the problem as a mitigating factor, and lost.

Under the new program, the commission said, fines will be based on the risk posed to the public and the conduct of the gas company, and will be triggered by a state inspection or a company-reported problem. The schedule of fines was released Friday.

"A citation should be looked at as a regulatory repercussion for a violation, intended to change future behavior," said commission spokeswoman Terrie Prosper.

Those with negligible risk are punishable by as much as $50,000. Low risk violations mean penalties up to $500,000, and moderate risk up to $1 million. A violation deemed to be high risk could draw a fine of $1 million or more, the commission said, while fines for offenses considered to carry an "extreme risk" will be left up to the five-member commission to determine.

The backlog of violation cases built up even though, after the San Bruno tragedy, California regulators had the power to act immediately rather than through the five-member commission.

Hundreds of violations

PG&E said last week that it had provided 59 self-admission reports of problems since December 2011 - the month it disclosed the leak survey problem in the East Bay - ranging from exceeding pressure limits on gas lines imposed under federal law to failing to check for corrosion. The reports included hundreds of violations.

The PG&E self-reports make up the bulk of the 65 reports lodged with regulators that are currently under review - reports that involve more than 600 violations. San Diego Gas and Electric and Southern California Gas, as well as other smaller utilities, account for the remainder.

State Sen. Jerry Hill, D-San Mateo - whose legislation calling for revamped enforcement and better monitoring of violations is on the governor's desk - said the new fine schedule comes as state regulation is in disarray. He said he hopes it will break a logjam.

"The PUC has been going in circles, with no direction and no focus with how to deal with violations," Hill said. "First, the (safety board) said they should be citing for violations, and the commission gave them that ability."

Then, after issuing the $16.8 million leak survey fine, "the utilities complained to the commissioners. Since then, they have done nothing," he said.

Hill noted that commission regulators, quoted in an assessment of the agency's efforts given to legislators this year, have clearly been frustrated.

'It's clearly chaos'

"We were told to issue citations. We issued citations," one regulator said. "No matter what we do, they change it."

"It's clearly chaos," Hill said. "They need to take some actions on these violations. If you don't do that, there will be no integrity with the system."

He noted that issuing large fines is not always the answer, saying regulators must scrutinize violations for patterns that reveal weak points in the gas system.

"If you are going to hit them with a $16.8 million every time they turn around, that is not conducive to an environment of self reporting," Hill said. "It's not just about money - it's about finding trends."

The head of gas operations for PG&E, Nick Stavropoulos, said the utility continues to report all violations it finds to regulators. "Our policy is, anything you find, you report it," he said.

Find it, report it, fix it

The company, he said, has stressed to workers and managers the importance of a system in which problems can be found, reported and fixed without fear of punishment. He said he hopes that regulators will take a similar stance - unless willful misconduct is involved.

He said the airline, nuclear, railroad and chemical industries have benefited by adopting voluntary systems that allow companies to relay problems without being fined.

"We are not under a microscope, we are under an electron microscope," Stavropoulos said. "We now have so much more review and analysis. To suggest this is back to the old days, whatever those old days were - I don't think what is happening today has any resemblance to what happened in the past."